The Postal Service, which is, for the most part, a government-mandated disaster, wants…
The Postal Service, which is, for the most part, a government-mandated disaster, wants $75 billion for corona virus relief. The reality is that USPS was pretty sick before it got hit with the virus:
- Heavy unfunded-pension obligations
- Strange, mandated pricing
- Poor allocation of costs
- Outdated equipment (look at the delivery vehicles – Grumman LLV = long life vehicle (appropriate) made 1987-1994)
- Huge competition that knows how to take advantage of the mandate that USPS deliver to every address
Reform is long overdue!
USPS, and all air-freight shippers, are seeing wildly higher costs. With fewer passenger planes in the air, a lot of airlift capacity is gone. Airfreight is normally 32% of capacity utilization (or ~20 tons on a 747) – so this scarcity has driven:
- Costs up from $3 to more than $10 per kg
- Airlines are stripping out seats and putting cartons in the overhead bins
- Airbus is making cargo pallets that slide into seat tracks
